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The partners of hedge fund giant Deephaven Capital Management are moving to separate themselves from Nasdaq trading firm Knight Capital Group by exercising an option that allows them to buy a big stake of the firm they founded, The Post has learned.

“Deephaven’s senior management is continuing to prepare to potentially acquire a significant stake in Deephaven by exercising our previously announced option to acquire 49 percent of the firm’s equity from Knight Capital Group in the coming months,” the firm’s CEO Colin Smith wrote in a letter delivered to investors last month.

“We are excited about this future development as we believe that by acquiring a direct equity ownership interest in the firm, coupled with the additional revenue sharing that we now enjoy, we will further strengthen our recruiting and retention efforts as we continue to grow.”

The move by Smith and his two deputies is expected to be completed in January. It is seen as the first step toward Deephaven’s separation from Jersey City, N.J.-based Knight, sources said.

Under the terms of the option, Deephaven will enter into a new revenue sharing arrangement with Knight that gives the trading company half of the firm’s first $60 million in pretax earnings and 25 percent after that.

Under the agreement, Smith and his partners have agreed not to sell Minneapolis-based Deephaven for less than $450 million without getting the consent of Knight first. Deephaven, which manages roughly $4.3 billion in assets, saw its flagship fund increase 2.7 percent for September and is now up 7.3 percent for the year, according to investors.

Sources said Knight rattled Deephaven’s top brass by announcing in August that it might need to refund a substantial portion of the $68.4 million in management fees that it collected from the firm in the first half of the year.

The announcement came before Deephaven was able to regain its performance after a horrible month for most hedge funds.

Sources said Knight has also indicated that it might reduce its investment in the Deephaven funds as part of a redeployment of capital to various strategic initiatives.

Last December, Smith and his deputies negotiated a new management contract with Knight that paid them more than the $20 million they received the previous year. The move was made as Deephaven continued to boost Knight’s profits while the traditional trading business declined.

In the third quarter of last year, Deephaven contributed $50 million to Knight’s $203 million in overall revenue, a threefold increase from the year before.

Knight shares, which are down over 35 percent this year, dropped 1 percent yesterday to close at $12.24.

The company, once a highflying Nasdaq trading firm, has suffered as margins shrink in the traditional market-making business, which matches buyers and sellers of Nasdaq stocks.